There exists a worldwide retirement crisis, especially with the aging of the so-called baby boomers (born between the 1940s and 1960s). People are healthier and live longer and that means that more provision for retirement needs to be made. This retirement crisis originates because the overwhelming majority of people do not save enough for their retirement and are consequently dependent on the government. The Dutch Reformed Church does not escape the crisis. Approximately 57% of the current clergy corps in South Africa and Namibia will have to retire within the next 15 years.
Only 6% of South Africans can retire comfortably and maintain the same living standard as before retirement. Apart from the very low saving rate, debt also plays a vital role in low retirement savings. The ideal for a successful retirement is that all debt should be paid up by retirement. This is, however, not possible for a lot of people, and it influences their retirement funding negatively.
Apart from the general concern with regard to retirement, there are several factors which are unique to the situation of the minister, like the possible loss of identity and status, the shift from the pulpit to the pew and the concept that the ministry is not only a job, but a calling. Another important aspect to take into consideration is that ministers need to scale down to a smaller property and often need to move out of the rectory after retirement.
The relationship between ministers and money can be complex. The Bible focuses largely on the negative aspects of money, like “No one can serve two masters” (Luke 16:13) or “the deceitfulness of wealth” (Mark 4:19). Such negative connotations in the Bible can lead to ministers’ not being very focused on money and this can have an impact on the attitude of the minister and the management of his personal finances.
In economic terms, ministers can be seen as irrational labour market participants. The reason for this is that as a result of their calling and faith, ministers can behave differently from professionals in other professions. Other professionals may be more interested in factors such as job prospects, salaries and promotions, while it will not necessarily be the case with a minister who has a calling. One of the major benefits provided to ministers is the free housing (rectory) in which they can reside during their working years.
This article is written from a financial point of view, with the focus on the housing of the minister and the impact thereof on his retirement prospects. The purpose of the article is to investigate whether the provision of free housing (the rectory) has an influence on the minister’s retirement planning. Due to the concern about the large number of ministers who will retire in the next few years and the impact it may have on the Dutch Reformed Church as a whole, it was requested that an investigation be made regarding these ministers. The study focused on their experience of their congregations, their own well-being, as well as their personal retirement finances. The study was originally commissioned by the General Synod of the Dutch Reformed Church in 2014. The assignment was directed to the General Synod Research Team of the General Synod, and the author was part of the team that compiled the specific research instrument and collected the data. The study is thus based on primary research.
The data was obtained by using a quantitative research design in the form of an online questionnaire, and the questionnaire was sent to all ministers in South Africa and Namibia who will retire within the next five years. An electronic program (Evasys) was used to e-mail the questionnaires to the respondents. The questionnaire was part of a larger study that focused on the minister and his congregation and retirement. Approximately 48% of the total of 309 questionnaires were returned.
All respondents were within five years of retirement; all were white, Afrikaans-speaking men between the ages of 59 and 64. The vast majority of respondents (87,4%) also indicated that they had been in service for 30 years or more. This is an indication that the ministry is a calling for most ministers, and not just a job, and also that they had only one calling during their professional career.
Of the total number of respondents, 40% live in their own homes, while the remaining 60% live in the rectory of the church. In terms of retirement housing, almost 80% of respondents indicated that they already had housing or knew where they were going to live. A very important result indicated that only about 38% of respondents could say that they had saved enough for retirement. A more in-depth question about whether their financial provisions are sufficient yielded approximately the same result. However, the largest number indicated that they were uncertain about the statement. This is worrying, since all respondents will retire within the next five years and it is a question to which they should definitely have an answer. More than 60% of respondents also indicated that they will have to continue working after retirement and that they are uncertain about the statement. The reason for continuing to work is not that their profession is a calling and that they want to continue working, but because of financial reasons, consistent with the results of previous international studies.
About 30% of the respondents indicated that they had not started saving soon enough for retirement, while about a third indicated that they do not make use of a reliable financial planner. Both of these results indicate financial negligence or ineffective management of finances and can have serious financial consequences for an individual. The fact that such a low percentage of respondents indicated that they do not experience financial stress is surprising. Again, it could indicate that ministers are irrational labour market participants, as a large number of respondents have not saved enough for retirement, or are completely uncertain about it, but still do not experience financial stress. Nearly 80% also indicated that their level of debt is not a problem. The correlations indicated that starting early enough in using the services of a reliable financial adviser, low financial stress levels and low levels of debt, contribute to the respondents’ sense that their retirement provision is sufficient. However, the linear regression indicated that the two most important factors for adequate financial retirement provision are a reliable financial planner, and starting to save early for retirement. This is a very important result, especially as it relates to ministers, as it seems that they need extra financial guidance as they think differently about money and could have a complex relationship with it.
Ministers residing in the rectory have reported very low levels of debt, while those living in their own homes indicated higher levels of financial retirement provision. Likewise, those who live in rectories were found not to have provided for future housing. It is as if there is a specific group that need serious consideration. Those still living in rectories, who have not planned for housing after retirement, indicating that they have not saved enough for retirement, nevertheless still experience low financial stress despite these concerns.
Serious consideration must be given by the church to financial awareness and the possible education of ministers in essential financial issues. Although the calling to the ministry is not necessarily financially motivated, financial insight, awareness and possible training are urgently needed to ensure that ministers have enough manna for the seventh day.
Keywords: Dutch Reformed Church (DRC); finances; housing; ministers; retirement
Lees die volledige artikel in Afrikaans: Pastorie of nie? Die invloed van gemeentebehuising op die aftredevooruitsigte van die NGK-predikant